Wall Street rallies amid Fed policy meeting

U.S. stocks moved higher on Tuesday as the U.S. Federal Reserve kicked off a two-day monetary policy meeting. Economists expected the U.S. central bank to announce for the first time a small tapering of its monetary stimulus at the meeting. Fed Chairman Ben Bernanke will hold a press conference after the meeting on Wednesday afternoon. Fifteen billion to 18 billion U.S. dollars are probable for the Fed to announce to taper at the meeting, Kenneth Polcari, director of New York Stock Exchange Floor Operations at O'Neil Securities, told Xinhua Monday. Mark Newton, chief technical analyst at Greywolf Execution Partners Inc., also told Xinhua Monday that it would be bullish for the market if the Fed cut 10 billion to 15 billion dollars of bond buying. The Fed now purchases 85 billion U.S. dollars a month in Treasury bonds and mortgage-backed securities. On the economic front, U.S. Consumer Price Index edged up 0.1 percent in August on a seasonally adjusted basis, the Labor Department said Tuesday. Excluding the volatile food and energy categories, the so-called "core" inflation index also rose 0.1 percent last month, indicating that inflationary pressure was largely absent. Moreover, following four consecutive months of improvement, U.S. builder confidence in the market for newly built, single-family homes remained unchanged in September, with a reading of 58 on the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday. In corporate news, Microsoft shares rose as the giant software maker sharply raised its quarterly dividend. In midday trading, the Dow Jones Industrial Average jumped 44. 58 points, or 0.29 percent, to 15,539.36 points. The S&P 500 gained 5.89 points, or 0.35 percent, to 1,703.49 points. The Nasdaq Composite Index was up 20.76 points, or 0.56 percent, to 3, 738.61 points.